Monthly investment

₹

Rate of interest (p.a)

%

Time period

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Invested amount | ₹ |

Est. returns | ₹ |

Total value | ₹ |

Total investment

Total interest

RD ALTERNATIVE

DHFL is a housing finance company headquartered in Mumbai. It has branches in all major cities across India. Apart from other financial products, it also offers a recurring deposit facility to customers at lucrative interest rates.

Depositors can park their excess disposable income in a DHFL RD account to earn a fixed rate of interest. They can also use a DHFL RD calculator to compute their returns before depositing.

The RD calculator for DHFL recurring deposit facility allows prospective depositors to calculate the amount they can earn from their parked funds on maturity. RD is a periodic saving scheme where an individual can deposit a specific sum of money every month.

These deposits accumulate and mature on a particular date in the future. It is an ideal savings scheme for individuals who have just started earning and do not prefer to deposit lump-sum in an FD.

The maturity period for DHFL RD ranges from 12 months or one year to 120 months or ten years. A DHFL RD calculator allows individuals to calculate returns from an RD across different periods to make a well-informed decision.

The RD interest rates offered by DHFL are 8% per annum on regular deposits across different periods. Further, DHFL provides an additional 0.40% interest rate for senior citizens. Therefore, the effective DHFL Recurring Deposit interest rate for senior citizens is 8.4% for periods ranging from 1 year to 10 years.

The interest on a DHFL Recurring Deposit is compounded every quarter. Therefore, if, for instance, a customer opened a recurring deposit account with DHFL on 1st June, then RD interest calculation would take place every year on 1st September, 1st December, and 1st March until maturity.

Furthermore, the interest is “compounded” every quarter. Therefore, interest is calculated not only on the principal amount but also on the interest that accrues. Hence, the DHFL Recurring Deposit scheme provides accelerated returns to account holders.

Nevertheless, the calculation for DHFL RD interest is based on the widely used formula for RD interest calculation. This formula also acts as the functioning mechanism behind the DHFL Bank RD calculator. This formula is given below –

**M = R x {(1 + n) x n – 1} / 1- (1 + i) (-1/3)**

In this Recurring Deposit maturity value formula,

- M stands for the maturity amount,
- R represents the monthly deposit amount,
- n denotes the lock-in period (in quarters), and
- i means the rate of interest, divided by 4 [due to quarterly interest calculation].

So in the calculator, all you have to do is enter the details in the respective fields and

*Example: Amit, a 64-year old pensioner, decides to open a DHFL Recurring Deposit account for a lock-in period of 5 years. He also opts for a monthly deposit amount of Rs.2000. Furthermore, he is eligible to earn interest at the rate of 8.4% per annum, as he is a senior citizen. *

Therefore, in Amit’s case, R = Rs.2000, n = 20 (5 years x 4 quarters), and i = 0.021 (0.084 / 4)

Ergo, M = Rs. [2000 x {(1 + 20) x 20 – 1} / 1 – (1 + 0.021) (-1/3)]

Or, M = Rs.149,301

Amit deposited Rs.120,000 (60 months x 2000) over the 5-year lock-in period and realized a maturity amount of Rs.149,301. Thence, the interest he earned over the five years amounts to Rs.29,301 (149,301 – 120,000).

However, instead of calculating the maturity amount and interest earned manually, individuals can also resort to the DHFL Recurring Deposit calculator. Using this online tool will eliminate any chance of miscalculation and provide an accurate understanding of one’s earnings from the DHFL Recurring Deposit scheme.

The factors that affect DHFL Recurring Deposit interest earnings are enumerated below –

**Age of the applicant**

The age of the applicant plays a role in the determination of DHFL Recurring Deposit interest rates. If a depositor is below the age of 60, he/she shall earn interest at the general rate, i.e. 8%. However, if a depositor is above the age of 60, i.e., a senior citizen), he/she shall earn interest at an additional rate of 0.4%, which adds up to 8.4%.

**Prevailing market interest rates**

Another crucial determinant of DHFL RD interest rates is the prevailing market rate at any point in time. Furthermore, the current rate is determined by the reverse repo rate – it is the percentage at which RBI borrows overnight funds from financial institutions. Therefore, an increase in the reverse repo rate will nudge the prevailing rates up, which will, in turn, prompt DHFL RD interest rates upward and vice versa.

The benefits of using a DHFL RD calculator are –

- It hosts a simple user interface.
- The DHFL RD calculator provides you with exact figures saving your time on intricate calculations.
- Individuals can use it to calculate their returns in a jiffy.

**Ques**. How does the DHFL recurring deposit calculator show accurate results?

**Ans**. It has been programmed in such a way that it provides you with accurate results. However, make sure that the values you enter are correct.

**Ques**. When is simple interest calculated in RD?

**Ans**. If you are opening a DHFL RD account in the middle of an ongoing financial quarter, for example in the month of June, the deposited amount will earn simple interest until the July end.

**Ques**. Does inflation have an effect on the interest rate on RDs?

**Ans**. No, slight inflation does not affect investment rates up to that extent but high inflation can reduce the RD rates.

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